Our Current Accounting Measuring Mess
The obvious question is, “How did we get into this accounting measuring mess?” The short answer is twofold:
1. We have mixed up our accounting toolsets (financial versus management accounting).
2. There has been a major change in the fundamental science of systems theory, which has refuted the definition of supply chains as linear systems.
Let’s start with the mix-up in accounting tools. The point of defining relevant information, relevant time frames, and the graphs depicting cost and revenue behavior is to clearly show that GAAP costing cannot be used interchangeably with cost as defined by economics ...